When assessing the major housing recovery occurring in 2013, some analysts believe that the homeowning of yesteryear is back on the comeback trail.
Nothing could be further from reality. Although overall percentages of mortgage-based ownership as opposed to rentals is as yet not clear-cut, it’s estimated that residential new construction includes a significant, and growing percentage of new building that is dedicated to rentals, or long-term leasing. Also becoming more significant is the purchasing of “homes for rentals” by foreign investors. A glaring example is a Southern California general contractor building a group of 1500 new homes in the Palm Springs area, with a waiting list double that number waiting for a second stage. He indicated that foreign investors are a major factor in this unexpected enterprise.
There are two major reasons as to why this impetus toward a housing comeback will accelerate into 2014 and beyond:
1) With the U.S. population on track to reach the 400 million mark during this century, a combination of new generations and a fear of getting stuck with substantial mortgages during another housing recession, rather than “flipping” at higher prices, makes major additional “temporary shelter” in upcoming years almost inevitable.
2) With high unemployment an unpleasant economic factor as far as the “eye can see,” this makes instant “mobility” in filling job openings in various parts of the country a mandatory necessity. Such a situation guarantees rental residential homes and apartment buildings as the dynamic behind America’s future residential construction.
In summation, “housing construction,” and all the amenities that accompany residences of today and tomorrow will continue to be the keystone that will keep general contractors, construction workers and a variety of subcontractors busy well into the rest of this decade.